Ex-Icelandic PM found guilty in bank crashes

The Guardian, LONDON

Geir Haarde, the former prime minister of Iceland and the only politician in the world to face prosecution for his role in the 2008 financial crisis, has been found guilty of failing to hold emergency Cabinet meetings in the runup to the crisis. However, he was cleared of three more serious charges, which could have jailed him for two years.

Haarde, who served as prime minister between 2006 and 2009, had pleaded not guilty to all the charges, including gross negligence over the government’s failure to prepare for the impending disaster.

Haarde attacked the guilty verdict as “absurd,” and accused the judges of bowing to political pressure.

“It is obvious that the majority of the judges have found themselves pressed to come up with a guilty verdict on one point, however minor, to save the neck of the parliamentarians who instigated this,” he said outside the country’s specially convened Landsdomur criminal court in Reykjavik.

Haarde was the first person in history to stand trial at the 15-judge court, which was created in 1905 to hear any charges brought against ministers.

Haarde fell from power after the country’s three biggest banks — Glitnir, Kaupthing and Landsbanki — collapsed, the country’s economy went into meltdown and the government was forced to borrow US$10 billion to prop up its economy.

“None of us realized at the time that there was something fishy within the banking system itself, as now appears to have been the case,” he said during the trial. “I think it’s illogical to think that I or anyone else in the government could have reduced the size of the banks to a greater extent than was done at the time.”

Haarde, 61, was also cleared of charges related to his failure to prevent the contagion from spreading to the UK by not insisting that Icelandic banks ring-fence their overseas operations.